As I’ve noted recently, the primary to represent Iowa’s third Congressional district has taken a strange turn, whereby the incumbent seems to be trying to make the race primarily about the challenger’s faults rather than the incumbent’s record of service.
I’ve been too busy in non-blog life to write up the day to day sparring following a recent e-mail from Leonard Boswell’s campaign, which attacked Ed Fallon on several fronts.
The criticism of Fallon by Boswell’s surrogates and supporters has focused on four issues in particular:
1. alleged ethical questions related to Fallon’s work for the Independence Movement for Iowa (I’M for Iowa)
2. the salary Fallon drew from unspent campaign funds following the 2006 gubernatorial primary
3. allegations that Fallon pondered running for governor as an independent after losing that primary
4. Fallon’s stand against taking contributions from PACs while allowing PACs to encourage their individual members to donate to his campaign.
I will cover each of those issues in a separate diary, because I don’t have time to write about all of them at once. Today, I will address the allegations related to I’M for Iowa.
Chase Martyn of Iowa Independent published a piece on March 20 called “Fallon Faces Campaign Finance Questions.” Martyn raised questions about I’M for Iowa’s ability to collect unlimited donations without disclosing the sources:
Although I’M For Iowa participates in political advocacy and relies on contributions to stay afloat, its financial status does not fit the typical mold for this type of organization. Rather than registering it as a nonprofit organization with the Internal Revenue Service under sections 501(c)(3), 501(c)(4) or 527, Fallon runs the organization as a for-profit general partnership, making its tax status no different from most home businesses. He and his current campaign manager, Lynn Heuss, co-own the business.
But there is a difference between I’M For Iowa and most typical businesses: Rather than sell products and services to customers, it accepts donations for its political advocacy work. While the donations are not tax-deductible, the business can accept unlimited amounts of money. And because of its tax status, it is not required to disclose information about its sources of funding.
Martyn also noted that two e-mails sent to I’M for Iowa’s distribution list appeared to have promoted Fallon’s Congressional campaign:
On Feb. 29 an e-mail Fallon wrote to his I’M For Iowa group invited readers to visit his campaign Web site and participate in campaign activities to coincide with his 50th birthday. And on Jan. 12 he sent an I’M For Iowa e-mail announcing his candidacy for Congress and providing a lengthy critique of his primary opponent’s voting record.
The result is a complicated question involving the nuances of campaign finance law. Can an unincorporated business accept unlimited contributions without the requirement to disclose its contributors and then use contributed funds to promote a congressional campaign?
Martyn suggested that even if no laws were broken, the questions could hurt Fallon’s image, since he has been a strong advocate of clean-elections laws (such as the Voter-Owned Iowa Clean Elections Act, which would create a voluntary system of public financing of election campaigns).
The Des Moines Register didn’t follow up on the Iowa Independent story until after the Boswell campaign drew attention to it a week later. Thomas Beaumont examined various questions related to I’M for Iowa in the Register on March 29:
The organization is a trade name registered with the Polk County recorder. Small businesses such as lawn care services and other sole proprietorships register this way.
However, some other advocacy organizations, such as the 15-year-old, Des Moines-based State Public Policy Group, is also registered the same way as Fallon’s group.
I’M for Iowa is not a corporation, over which the Iowa secretary of state has regulatory authority.
Fallon’s group does not have to report its sources of money or what kind of business it is. But it receives no money from corporations, said Lynn Heuss, Fallon’s partner in the organization.
It runs on contributions from individuals who support its agenda, which includes limiting large livestock confinements, curbing global warming, promoting campaign finance reform and preventing abuse of eminent domain.
It seems clear that there is no legal barrier to using the I’M for Iowa e-mail list to promote Fallon’s Congressional campaign.
Martyn wrote in Iowa Independent:
A representative of the Federal Elections Commission would not comment on any matters that regulators may have to rule on, but FEC regulations do not seem to explicitly prohibit coordination between a campaign and an unincorporated business entity owned by a candidate.
Beaumont’s March 29 article for the Register notes that
Campaign finance law bars corporate contributions from federal races. However, the law specifies corporations and limited liability companies, which Fallon’s group is not.
According to a press release from Fallon’s campaign on April 2, the information services department of the Federal Election Commission “confirmed that Ed Fallon has done nothing illegal or unethical.” The full text of that release is after the jump, but here is a relevant excerpt:
Fallon campaign manager, Lynn Heuss, provided the rules the campaign reviewed with the FEC Information Officer: From the FEC Candidate Guide, Chapter 4, Section 10, “Partnerships are permitted to make contributions according to special rules. 110.1(e) and (k)(1). For further details, see Appendix B.”
In addition, Chapter 4, Section 12 of the FEC Candidate’s Guide says, “When candidates use their personal funds for campaign purposes, they are making contributions to their campaigns. Unlike other contributions, these candidate contributions are not subject to any limits. 110.10; AOs 1991-9, 1990-9, 1985-33 and 1985-60. They must, however, be reported (as discussed below).” And a little further down under “Definition of a Candidate’s “Personal Funds” it says, “The personal funds of a candidate include: Assets which the candidate has a legal right of access to or control over, and which he or she has legal title to or an equitable interest in, at the time of candidacy; income from employment; ….”
Heuss clarified the only contribution the business has made is sending out two email messages, which constitute an in-kind donation, and is not in violation of FEC regulation.
(UPDATE: Chase Martyn reported on April 3 that the FEC denied making “any determination relative to the specific circumstances of any campaign”. Martyn added that Iowa Independent had merely questioned the ethics of how I’M for Iowa was used and not alleged that any laws were broken.)
If no laws were broken, what is the problem? The Boswell campaign has tried to suggest that there is something underhanded about I’M for Iowa. From the Register’s March 29 article:
“If he’s going to run on clean elections, then he should come clean about what he’s doing,” Boswell campaign spokesman Mark Daley said.
[…]
The ethics questions are the latest jab by Boswell ahead of the June 3 primary.
“On the surface, this looks like a fund to give him a job,” Daley said.
Although I’ve donated to Fallon’s gubernatorial and Congressional campaigns, I have never contributed money to I’M for Iowa. As a result, I haven’t followed the organization’s work very closely.
But if individuals want to give money to help Fallon advocate for clean elections, or organize opposition to coal-fired power plants and CAFOs, what is the problem?
Non-profit organizations are unable or unwilling to take a position on some kinds of political disputes, so there is a niche for a business like I’M for Iowa.
Does the Boswell campaign mean to suggest that advocacy work is not a real job? That seems strange. Barack Obama’s supporters and television commercials have praised that candidate for working as a community organizer after finishing law school.
Frankly, I’m a little surprised the Boswell campaign wants to go down this road, since Boswell’s campaign accepted hundreds of thousands of dollars from corporate PACs in 2007 alone. I’m supposed to be concerned about the hidden agenda of individuals who have contributed to I’M for Iowa?
Asked to comment in the Register article of March 29, Fallon characterized the allegations as typical establishment politics:
“The political establishment attacks a candidate on his strength,” Fallon said. “My strength is my commitment to issues. They are looking for ways to discredit me.”
Fallon’s campaign addressed the controversy in more detail in statements released on March 31 and April 2. The full text of those press releases are after the jump.
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